Friday, May 15, 2009

Oil Prices: Analysts Now Slashing 2010 Crude Forecasts

Let's see, we've got "Oil Floods Rotterdam, Europe's Largest Port, as Demand Drops" indicating storage is topping off. In the post below we see OPEC spare production capacity could be at 6mm Bbl/day by year's end and oil is still kissing $60? Anyone know why it isn't trading at $30? Anyone?*From Environmental Capital:

Crude oil futures, spurred by some decent U.S. and Chinese economic data this week, flirted briefly with $60 a barrel, a six-month high. But sour economic fundamentals have analysts bearish about crude’s medium-term outlook. A Dow Jones Newswires survey released Friday shows almost 30 analysts have substantially sliced their 2010 forecasts for both of the world’s main oil-price benchmarks and basically left their 2009 outlooks unchanged from last month.

Seeing a slower recovery in global economic growth–the euro zone reported a record contraction–and oil consumption than a month ago, the analysts on average cut their 2010 price forecasts for the U.S. benchmark, WTI, to $62 a barrel. That’s an 11% reduction from an average price of $70 a barrel projected just last month....MORE

*Economics Teacher: In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this.

Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics.